Oil Prices Plunge Over 13% as US-Iran Ceasefire Announcement Eases Supply Fears

Global oil markets tumbled sharply on Wednesday after US President Donald Trump announced a conditional two-week ceasefire with Iran, raising hopes that the critical Strait of Hormuz could soon reopen to tanker traffic.

Benchmark Brent crude fell as much as 15-16% intraday, trading near $92-$95 per barrel in early Asian and European sessions, according to multiple market reports. West Texas Intermediate (WTI) crude posted even steeper losses, dropping more than 15% toward $93-$95.

The sharp decline came after prices had spiked above $110 in recent days amid escalating tensions, disruptions to shipping through the Strait of Hormuz, which handles about one-fifth of global oil and gas flows — and fears of broader supply shocks from the five-week-old conflict.

Trump stated on social media that the US would suspend attacks on Iran for two weeks, contingent on Tehran allowing the “complete, immediate, and safe opening” of the Strait of Hormuz. The announcement followed intense diplomatic efforts, including mediation involving Pakistan.

Analysts described the sell-off as a rapid unwinding of the geopolitical risk premium that had built up in recent weeks. While the ceasefire is temporary and conditional, traders bet that even a short-term de-escalation could allow some resumption of oil flows, easing immediate supply concerns.

Prices remained volatile, with some reports showing Brent settling around $92-$95 after the initial plunge. Markets will closely watch whether Iran accepts the terms and begins allowing safe passage through the strait.

This development also boosted stock futures and Asian markets, as investors welcomed the reduced risk of a prolonged energy crisis. However, analysts caution that any breakdown in the fragile truce could quickly send prices surging again.